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Searching 2021-2022 Session

The Vermont Statutes Online

 

Title 9A : Uniform Commercial Code

Article 009 : SECURED TRANSACTIONS

(Cite as: 9A V.S.A. § 9-620)
  • § 9-620. Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral

    (a) Except as otherwise provided in subsection (g) of this section, a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:

    (1) the debtor consents to the acceptance under subsection (c) of this section;

    (2) the secured party does not receive, within the time set forth in subsection (d) of this section, a notification of objection to the proposal authenticated by:

    (A) a person to which the secured party was required to send a proposal under section 9- 621 of this title; or

    (B) any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;

    (3) if the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and

    (4) subsection (e) of this section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to section 9- 624 of this title.

    (b) A purported or apparent acceptance of collateral under this section is ineffective unless:

    (1) the secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and

    (2) the conditions of subsection (a) of this section are met.

    (c) For purposes of this section:

    (1) a debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default; and

    (2) a debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default or the secured party:

    (A) sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;

    (B) in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

    (C) does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.

    (d) To be effective under subdivision (a)(2) of this section, a notification of objection must be received by the secured party:

    (1) in the case of a person to which the proposal was sent pursuant to section 9- 621 of this title, within 20 days after notification was sent to that person; and

    (2) in other cases:

    (A) within 20 days after the last notification was sent pursuant to section 9- 621 of this title; or

    (B) if a notification was not sent, before the debtor consents to the acceptance under subsection (c) of this section.

    (e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to section 9- 610 of this title within the time specified in subsection (f) of this section if:

    (1) 60 percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

    (2) 60 percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.

    (f) To comply with subsection (e) of this section, the secured party shall dispose of the collateral:

    (1) within 90 days after taking possession; or

    (2) within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and authenticated after default.

    (g) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures. (Added 1999, No. 106 (Adj. Sess.), § 2, eff. July 1, 2001.)